vinays

I didn't really understand the punch line:

"the prices will at best stagnate/ see minor correction on selective projects/locations"

Trying to relate to a concrete example:

If a salaried middle class guy has bought a Chintels at 3800/- as a short term investment, he will want to get out as otherwise he has to arrange installment payments in a depressing market for an asset going down in value. I guess to sell at 3600/- and walk away might feel sensible to her/him.

Those who bought at 3200 will surely be competing by trying to sell at 3550.

So downward spiral could form at some point if sustained negativity remains.

On another topic:

Also NRIs are smart today - who will take their 100% white money and convert it into black - in a place which has shoddy infrastructure for them to retire (as a fall back reason to buy)? Any insight why it is thought that NRIs could lift the market with US$ appreciating? By the way it is only US$ and other NRIs don't even have the same reason.

gurgaon79

Can we buy in CLP mode from the painter or it has to be Downpayment only ?

Where can i shop for this in NCR and whats the minimum investment needed ?

AmitMM

It is not a punch line buddy its my view point which is mostly self explaintory...

explained through your concerete example yes if a salaried middle class , over leveraged bought chintel at 3800, paying about 30% upfront knowing that the demand would come up for next 20-25% very soon and after paying 55% of his hard earned money( with possibly 35% paid through loan) is treating his investment of 80L as short term in todays market with no means to pay the balance inst. then for sure he is in trouble..

and the situation will be exactly as you mentioned.. this guy will have to be realistic in his paying capability and investment objective

now coming back to my "punch line" what i mean is that ground realities do not point to major- long lasting correction which we are expecting YET
also remember that in todays market
1. dont enter in the market with short term view
2. dont over leverage
3. stay away from grade C builder
4. dont look at exceptional gains. treat RE as another asset class not a tool for quick high return vehicle

if these are followed he will probably not have to contribute to the down word spiral...

AmitMM

most paintings are bought on down payment basis with own funds ( no bank finance yet)...
not much guidance/information is available for a retail , stand alone investor in the indian market yet..
identification of a investment grade artist is a tricky business..
try getting in touch with a few art galleries/curators of art shows . this could form the first step.. and as you gather more info and are comfortable take the plunge..
now the investment can be as small as a lakh or two. will depend on how established/promising the artist is...there is no upper limit ..

rushilarora

Only relevant guidance available is auction data. This is available on Indian auction sites like Saffronart.com. For more detailed study one can buy artist specific reports from arttactic.com which has the most comprehensive database of Artists and their price movement in last 50 years.

They also follow all the auctions around the world and their info is considered one of the most authentic report on art market in the world.

AmitMM

yes vazirani's saffronart is a source.. similarly one can look at neville tuli's osian..
the idea is to gather a understanding...

sakiv13

Guys,

Thanks a lot for all your inputs and POVs since it helps us build a meaningful story from different perspectives. AmitMM and Amit001, i certainly agree with your explanations and logic explaining the slimming definition of bubble.

Had a curious thought and hence sharing.....

When we talk about a RE bubble we talk about developed countries or atleast markets that are regulated (Mumabi, as an indian city). All other cities or countries which are not regulated (Thailand, Vietnam, Cambodia, cities in India etc), how can they witness a bubble when the builder exploits the laws to suspend construction, hold on payments, change plans etc (the list is endless) to counter a correction or a bubble crisis?

Let me explain this with better reference.... Lets say the indian RE bubble (if there is any) bursts; builders in cities like Mumbai come under tremendous pressure (although they can still work around) to deliver to their commitments and hence might take steps like subvention schemes, 80-20 payment plans etc as it was visible 2008. Cities like Gurgaon, even if you dont have a crisis, the builder is free to exploit the system, not deliver on time, suspend construction etc (DLF, a classic example) but drop his price. Now from an end user perspective, a person who is invested in such a project either will not be able to sell his investment or will take a breath (coz of no payments, if the project is suspended) in a crisis situation.

The point I am trying to make is , I didnt see any downward pressure on production/construction in non regulated cities for us to really say the bubble will burst. I remember during 2008 , due to the RE crash, delhi/gurgaon properties were affected merely due to a negative sentiment which dissolved in mere 30 days and properties bounced back to double the level. Mumbai on the other hand had long lasting damages.

Black money, NRE pockets, high demand are indeed reasons to dilute the bubble but the biggest escape route i see is lack of laws/rules and regulations which help the builders play with the investors/market.

Just my POV.

Thanks again to all for contributing to such an informative thread and thanks to gurgaon79 for starting it :-)

Cheers

amit001

Thanks Sakiv - thats a great point...

This is indeed shaping into a great intellectual discussion...

sakiv13

Cheers Amit. I tend to think with a macro picture... (can't help it being a banker :-) ).

I certainly see a rocky/bumpy road ahead but the dynamics would be shaped by more than 1 driver for atleast the non regulated RE markets in India. Not to say that this is the best or worst time to invest, but due deligence, a lil bit of foresight, a bit more of research and a lot a good fortune is what would make a happy/better investor.

For more interesting read around ASIA/APAC and the region, I am attaching a link below published by Standard Chartered Bank a while ago which is quite crisp and candid.

http://www.standardchartered.com/id/...2010-final.pdf

Keep Smiling , All :-)

sakiv13

Greetings!

Was just hoping to see more valuable comments and PoVs to keep this thread alive. It is indeed very enriching and helpful to know and talk to people from different trades and have a intellectual discussion.

Any more thoughts on the Bubble?